Zara founder’s cancer donation stirs controversy in Spain

The billionaire founder of clothing giant Zara is donating €320 million ($361 million) in cutting-edge cancer-fighting equipment to hospitals in Spain, an act that has raised stinging criticism -- to the dismay and incredulity of patients.

Zara founder's cancer donation stirs controversy in Spain
Amancio Ortega is the richest man in Spain. File photo: Miguel Riopa/Daniel Lobo/AFP

Far-left party Podemos and associations defending public health have said the donation via Amancio Ortega's foundation is inappropriate because his clothing company Inditex, which owns Zara and other brands, is accused of tax avoidance — a claim the group denies.

Ortega should “not be demonstrating his philanthropy but his desire to contribute to public finances in a way that is proportional to his profits,” the Federation of Associations for the Defence of Public Health Services said in a statement earlier this month.

READ MORE: Zara king Ortega falls foul of tax office

Luisa Lores, spokeswoman for the federation, told AFP it was also a “way to avoid paying taxes” as part of the donation is tax deductible.   

But this reaction has been met with incredulity by others — including cancer patients — who say any donation is welcome in a country where the public health system suffered from huge spending cuts during the financial crisis.

“I need to live, and there are thousands of people like me fighting cancer, we get up every day with side effects, we get up every day trying to smile, to fight for life,” Tina Fuertes, a cancer patient, said Wednesday on Spanish television.

“It hurts, I don't understand, this doesn't make sense,” she said of the controversy.

Podemos chief Pablo Iglesias has also hit out at Ortega, one of the world's richest men, accusing him of carrying out a marketing ploy and deploring that “philanthropy should be seen as a mechanism to finance public health” in Spain.   

The donation represents eight percent of last year's public health budget in Spain, where more than 200,000 cancers are diagnosed annually, according to Ortega's foundation.

Hospitals in Galicia in the north and Andalusia in the south have already received various pieces of equipment.   

The foundation told AFP it would continue implementing the programme in other hospitals.


After crisis, Spain textiles sector dons new colours

Spain's textile sector, flush with the glittering success of brands such as Zara, is beginning to recover from a crisis sparked by cut-throat competition from Asia that destroyed a third of its firms in less than a decade.

After crisis, Spain textiles sector dons new colours
Spain's textile exports, which account for 60 percent of sector-wide sales, rose by 7.0 percent last year. Photo: Josep Lago/AFP

Inditex, owner of a range of brands such as Zara, Massimo Dutti and Bershka, easily beat its closest rival, Sweden's H&M, in terms of earnings last year, booking a bottom-line net profit of over €3.0 billion ($3.4

Thanks to the success of Inditex's “fast-fashion” brands, along with that of two other major Spanish high street clothing retailers, Mango and Desigual, Spain is a key player in the global fashion sector.

Clothing and textiles account for nearly three percent of the country's gross domestic product. And in terms of sector sales, Spain is Europe's fifth-largest producer behind Italy, Germany, Britain and France, according to Spanish textile association Texfor.

Texfor calculates that the number of Spanish suppliers of fabric, fibres and accessories such as buttons has plunged by about a third since 2008.

The Spanish sector, like its counterparts in other western countries, has been hit by fierce competition from Asia, as well as a slump in demand due to the global economic downturn.

Spanish textile firms were slow to innovate and adapt to the increasingly fast-changing demands of the fashion industry, said Antonio Valdivia, professor in strategy and marketing at the EAE Business School.

Many company bosses in the sector still have “a mentality of industrialists, not of entrepreneurs,” he complained.

'Respond more quickly'

But last year, the number of textile firms stopped falling for the first time since 2008, stabilising at around 3,500 companies.

The sector is benefitting from Spain's economic rebound – growth stood at 3.2 percent in 2016, double the eurozone average — and the disappearance of less competitive firms.

“The firms that survived were those that were export-orientated, able to diversify their order book” and respond more quickly to customers' demands, said Manuel Diaz, the head of the CIE, the body that represents Spain's main textile firms.

Spain's textile exports, which account for 60 percent of sector-wide sales, rose by 7.0 percent last year.

Indeed, Spain now ships raw fabric to Morocco – the number one destination for Spain's textile exports – where it is transformed into clothes for major international brands.

After having “neglected” Spanish suppliers in the past, major retailers such as Inditex and Mango have started using them more and more, but there is still room for improvement, Diaz said.

Inditex says the number of Spanish suppliers that it uses, not only for textiles, has increased by nearly nine percent since 2012.

Higher added value

The focus on international sales adopted by major fashion retailers has also pushed smaller firms to modernise and shift their focus to activities with higher added value, analysts said.

“I would rather see 50 people busy doing high-level graphic design than 50 people sewing T-shirts,” said Frederic Sabria of the IESE business school.

Companies have also diversified away from fabrics destined only for fashion and now also make “technical” fabrics for the automobile, agriculture or sports sectors.

Products with a higher added value represent 60 percent of the output of Spain's textile firms, according to Texfor chief, Andres Borao.

The textile sector hired 45,000 people in 2016, 3.7 percent more than in the previous year, welcome news in a country grappling with the EU's second-highest jobless rate of 18.6 percent.

While most new hires in Spain are offered temporary contracts, the majority of those hired by the textile sector last year were given open-ended contracts, said Borao.

“That's satisfying,” he said.

By Emmanuelle Michel